Is a sourcing company in China a valuable business partner or an invaluable middle man?

Sourcing companies in China can prove to a valuable business partner for you in importing Chinese goods for your business. At the same time some of them can also be invaluable middle men who have charged you hefty unit prices and caused delay of delivery of your goods. Since, China sourcing company is not a regulated industry; any tom, dick and harry can claim to offer best services as China sourcing agent. In this article we will find out what a good China sourcing company can do for you and how much shall you pay to such company?

Why do I need a China sourcing agent for my business?

  • The first and foremost role of sourcing agent is to identify best suppliers as per the needs, budgets and demands of the customer. Apart from budget and demands in the home country of the customer they also take care of the technical requirement of the customers and offer services accordingly.
  • Since it is not a regulated industry, there are no set standards about how the sourcing company works or quality and commitment in their services. Some of the sourcing companies work way is purely based on relationship with suppliers. All they do is funnel the client in their already existing network of suppliers and earn commissions from both the sides. On the other hand some other sourcing companies take the pain of finding best suited supplier as per requirements of the customer.

  • If a sourcing agent hired by you select the supplier based purely on the technical specifications and product required given by you rather than the hefty commission they will get from the supplier then it will be a win-win situation for the customer, sourcing agent and the supplier. Integrity in business will bring fruitful rewards for all.
  • A sourcing agent can do lot more than just finding a good supplier for your business. They can be of great help in other aspects of business such as factory audits, inspection of quality of products, quality of finished goods and making a contract with the supplier. But as mentioned earlier, since it is not a regulated industry, all these services has to be discussed with the sourcing agent and is subjective to their business policy and values.

How much shall you pay to a sourcing company?

This is again a million dollar question if you are hiring a sourcing agent in China. Since it is not a regulated industry, each sourcing company has its own pricing policies. Earlier it was a norm that sourcing companies fee was commission based whose value depended on the size of the shipment. But in the present times most of the sourcing companies have adopted fixed price policy. Their charge is based on per project. It also depends on what exactly the company is doing for you. Is it purely a sourcing agent or it is also assisting you on other aspects of the business.